Appeal details
Counselvise Citation
9521114 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-12-2012
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
07-12-2012
Assessment Year
2005-2006
Appeal Filed On
23-01-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NOS.90 TO 94/BANG/2012 ASSESSMENT YEARS : 2005-06 TO 2009-10 SHRI M.J. BALACHANDER, 16, 1 ST MAIN ROAD, VASANTH NAGAR, BANGALORE PAN : ADBPM6694A VS. DY.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 (2), BANGALORE. APPELLANT RESPONDENT ITA NOS.95 TO 99/BANG/2012 ASSESSMENT YEARS : 2005-06 TO 2009-10 ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 (2), BANGALORE. VS. SHRI M.J. BALACHANDER, 16, 1 ST MAIN ROAD, VASANTH NAGAR, BANGALORE PAN : ADBPM6694A APPELLANT RESPONDENT ASSESSEE BY : SHRI VIJAY MEHTA, C.A. DEPARTMENT BY : SHRI. FARHAD HUSSAIN QURESHI, CIT (DR- II), ITAT. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 2 OF 37 ITA NOS.100 TO 106/BANG/2012 ASSESSMENT YEARS : 2003-04 TO 2009-2010 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), BANGALORE. VS. M/S. VENKATESHA EDUCATION SOCIETY, 125, ARMSTRONG ROAD, SHIVAJI NAGAR, BANGALORE 560 001. PAN : AAATV 1990J APPELLANT RESPONDENT C.O. NOS. 50 TO 51/BANG/2012 (IN ITA NOS.100 TO 101/BANG/2012) ASSESSMENT YEARS : 2003-04 TO 2004-05 M/S. VENKATESHA EDUCATION SOCIETY, 125, ARMSTRONG ROAD, SHIVAJI NAGAR, BANGALORE 560 001. PAN : AAATV 1990J VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), BANGALORE. CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI. FARHAD HUSSAIN QURESHI, CIT ( DR- II), ITAT. ASSESSEE BY : BALARAM R.RAO, ADVOCATE FOR MR.S.PARTHASARTHI, ADVOCATE. DATE OF HEARING : 12.12.12 DATE OF PRONOUNCEMENT : 21.12.12 ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 3 OF 37 O R D E R PER BENCH: ITA NOS.90 TO 94/BANG/2012 ARE APPEALS BY THE AS SESSEE, AN INDIVIDUAL BY NAME M.J. BALACHANDER [HEREINAFTER RE FERRED TO AS MJB ]. ITA NOS. 95 TO 99/BANG/2012 ARE APPEALS BY THE REVE NUE. ALL THESE APPEALS ARE DIRECTED AGAINST COMMON ORDER DATED 15. 11.2009 OF CIT(APPEALS)-VI, BANGALORE, RELATING TO A.Y. 2005-0 6 TO 2009-10. 2. ITA NOS. 100 TO 106/BANG/2012 ARE APPEALS BY THE REVENUE IN THE CASE OF AN ASSESSEE, M/S. VENKATESHA EDUCATION SOCI ETY AGAINST THE COMMON ORDER DATED 14.11.2011 OF THE CIT(APPEALS)-V I, BANGALORE RELATING TO A.YS. 2005-06 TO 2009-2010. CO NOS. 50 & 51/BA NG/2012 ARE CROSS OBJECTIONS BY THE ASSESSEE AGAINST THE VERY SAME OR DER OF THE CIT(APPEALS) RELATING TO A.YS. 2003-04 TO 2004-05. 3. ALL THESE APPEALS HAVE SOME COMMON ISSUES ARISIN G OUT OF THE SAME FACTS AND CIRCUMSTANCES. THESE APPEALS WERE HEARD TOGETHER. WE DEEM IT PROPER TO PASS A CONSOLIDATED ORDER. 4. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THESE APPEALS AND CROSS OBJECTIONS ARE AS FOLLOWS. 5. M/S. VENKATESHA EDUCATION SOCIETY IS A SOCIETY R EGISTERED UNDER THE MYSORE SOCIETIES REGISTRATION ACT, 1961, [HEREINAFT ER REFERRED TO AS THE SOCIETY ] FOR THE PURPOSE OF ESTABLISHING EDUCATIONAL INSTI TUTIONS FOR THE BENEFIT OF TAMIL SPEAKING STUDENTS OF BANGALORE. T HE SOCIETY RUNS ABOUT 9 INSTITUTIONS LIKE ENGINEERING COLLEGE, MEDICAL COLL EGE, POLYTECHNIC, NURSING ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 4 OF 37 COLLEGE, D.ED. AND OTHER EDUCATIONAL INSTITUTIONS. THE SOCIETY IS MANAGED/GOVERNED BY A MANAGING COMMITTEE. ONE MR. M.J. MOHAN LOOKED AFTER THE AFFAIRS OF THE SOCIETY IN HIS CAPA CITY AS SECRETARY OF THE SOCIETY. ONE M.J.BALACHANDER, (HEREINAFTER CALLED MJB), BROTHER OF THE SECRETARY WAS APPOINTED BY THE SOCIETY TO LOOK AFTE R THE ADMISSION PROCESS OF THE VARIOUS INSTITUTIONS. MJB HAD TO REPORT TO THE SECRETARY IN MATTERS RELATING TO ADMISSION OF STUDENTS IN THE VARIOUS ED UCATIONAL INSTITUTIONS RUN BY THE SOCIETY. MJB WAS NOT IN THE MANAGING COMMIT TEE OF THE SOCIETY. ONE MR. M.J. RAMANI IS THE PRESIDENT OF THE SOCIETY AND MEMBER OF THE MANAGING COMMITTEE. MJB WAS THE YOUNGER BLOOD BROT HER OF M.J.RAMANI AND M.J.MOHAN. THE OTHER MEMBERS AND OFFICE BEARERS WERE DR. ARULMOZHI, A.M. VENUGOPALAN, K.C. VENKATARAMANI, S. GOVINDARAJAN AND B. SWAMINATHAN. 6. MJB WAS A MEMBER OF THE GOVERNING COUNCIL OF MVJ COLLEGE OF ENGINEERING, ONE OF THE INSTITUTIONS RUN BY THE SOC IETY. AS ALREADY STATED, IT IS THE SOCIETY WHICH MANAGES ALL COLLEGES AND AS GO VERNING COUNCIL MEMBER, MJB HAD TO ACT WITHIN THE AUTHORITY GIVEN T O HIM BY THE MANAGING COMMITTEE OF THE SOCIETY, IN PARTICULAR THE SECRETA RY AND CORRESPONDENT MR. M.J. MOHAN, TO WHOM HE HAD TO REPORT ON THE DUT IES ALLOCATED TO HIM. 7. THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT U/S. 132 OF THE INCOME-TAX ACT, 1961 (THE ACT) ON 16.09.2008 AT T HE OFFICE OF THE SOCIETY AND THE MEMBERS OF THE MANAGING COMMITTEE OF THE SO CIETY AND ALSO IN THE RESIDENTIAL PREMISES OF MR. MJB. IN THE COURSE OF SEARCH, SEVERAL DOCUMENTS WERE FOUND WHICH SHOWED THAT OVER AND ABO VE THE NORMAL FEE ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 5 OF 37 THAT HAD TO BE COLLECTED AS PER LAW, CERTAIN SUMS H AD BEEN COLLECTED. THE EXCESS SUM SO COLLECTED IS REFERRED AS EXTRA TUITIO N FEE ( ETF ) IN THE SEIZED DOCUMENTS AS WELL AS IN THE ORDERS OF THE AS SESSING OFFICER AND THE FIRST APPELLATE AUTHORITY. THERE WAS NO SEIZURE OF CASH IN THE CASE OF SEARCH OF THE SOCIETY OR ANY OF ITS MANAGING COMMIT TEE MEMBERS. IN THE SEARCH CONDUCTED IN THE RESIDENTIAL PREMISES OF MJB , CASH OF RS.1,20,95,900 WAS FOUND. A STATEMENT ON OATH WAS RECORDED BY THE AUTHORISED OFFICER CONDUCTING THE SEARCH U/S. 132(4 ) OF THE ACT. IN THE STATEMENT SO RECORDED, MJB STATED THAT THE CASH FOU ND IN HIS POSSESSION WAS TUITION FEE COLLECTED BY THE SOCIETY AND THAT T HE SAME WAS HANDED OVER TO HIM BY HIS BROTHER, M.J. MOHAN. THE PAPERS FOUN D ALONG WITH THE CASH CONTAINED A NARRATION, THE FOLLOWING AMOUNT IS HAN DED OVER TO SRI M.J. BALACHANDER SIR. THE AUTHORISED OFFICER WAS THERE FORE NOT CONVINCED WITH THE CLAIM OF MJB THAT CASH FOUND WITH MJB WAS GIVEN TO HIM BY HIS BROTHER, M.J. MOHAN. HE THEREFORE QUESTIONED MJB ON THE AFO RESAID CLAIM WHICH WAS AS FOLLOWS:- Q.NO.4 SOME OF THE PAPER COVERS IN WHICH CASH WAS FOUND CONTAINED THE PAPERS PUT AS SEIZED MATERIAL A/MJB/ 1/2008-09. IN THESE PAPERS IT HAS BEEN SPECIFICALLY STATED THA T \THE FOLLOWING AMOUNT IS HANDED OVER TO SRI.M.J.BALACHANDER SIR. IT ALSO CONTAINS DENOMINATION AND VALUE OF THE CASH CONTAIN ED IN THE COVER WHICH MATCHES WITH THE ACTUAL VALUE. UNDER T HESE CIRCUMSTANCES HOW CAN YOU SAY THAT THE AMOUNT HAS B EEN HANDED OVER TO YOU BY YOUR BROTHER DR.MOHAN? ANS. MY BROTHER DR.MOHAN GAVE THESE CASH BAGS AND T OLD ME TO KEEP IT FOR SAFE CUSTODY TILL HE RETURNED. PROBABL Y BECAUSE HE IS GIVING ME THE CASH HE MUST HAVE GOT MY NAME MENTION ED IN THE STATEMENT YOU ARE REFERRING. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 6 OF 37 HOWEVER AT THE TIME OF ASSESSMENT, THE AO TOOK THE STAND THAT THE SOCIETY COLLECTED ETF FROM STUDENTS SEEKING ADMISSI ON TO THE VARIOUS EDUCATIONAL INSTITUTIONS RUN BY THE SOCIETY. THE S OCIETY TOOK THE STAND THAT ETF WAS COLLECTED BY MJB ON HIS OWN WITHOUT TH E KNOWLEDGE AND AUTHORITY OF THE SOCIETY. MJB IN HIS ASSESSMENT AC CEPTED THE STAND TAKEN BY THE SOCIETY. MJB ALSO SUBMITTED THAT THE ENTIRE ETF COLLECTED AS PER THE SEIZED DOCUMENT SHOULD NOT BE ASSESSED A S INCOME BECAUSE ETF WAS REFUNDED TO STUDENTS WHO DID NOT ULTIMATELY TAKE ADMISSION. MJB ALSO EXPLAINED THAT ETF WAS COLLECTED FROM STUD ENTS WHO SEEK ADMISSION. ULTIMATELY IF THEY DO NOT OPT TO JOIN T HE COLLEGES OF THE SOCIETY, THEY WILL BE REFUNDED THE ETF. MJB CLAIME D THAT 50% OF THE ETF WAS REFUNDED. THEREFORE, ONLY 50% OF THE ETF A S EVIDENCED BY THE SEIZED DOCUMENT AS HAVING BEEN COLLECTED SHOULD BE ASSESSED AS INCOME IN HIS HANDS. 8. THE ASSESSING OFFICER HELD THAT ETF WAS RECEIVED BY THE SOCIETY AND ASSESSED IT IN THE HANDS OF THE SOCIETY SUBSTAN TIVELY. THE AO ASSESSED ETF PROTECTIVELY IN THE HANDS OF MJB. THE AO GAVE REDUCTION IN THE QUANTUM OF ETF ONLY TO THE EXTENT OF EVIDENCE P RODUCED FOR HAVING REFUNDED ETF TO THE STUDENTS. THE CIT(APPEALS) HEL D THAT ETF WAS TO BE ASSESSED ONLY IN THE HANDS OF MJB AND NOT IN THE HA NDS OF THE SOCIETY. ON THE QUANTUM OF ETF TO BE ASSESSED, THE CIT(A) HELD THAT 60% OF THE ETF COLLECTED AS PER SEIZED DOCUMENT HAS TO BE ASSESSED TO TAX AND 40% WAS HELD TO HAVE BEEN REFUNDED. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 7 OF 37 9. THE MAJOR COMMON ISSUE TO BE DECIDED IN ALL THES E APPEALS IS AS TO WHETHER ETF IS TO BE ASSESSED IN THE HANDS OF THE S OCIETY OR MJB AND WHAT IS THE QUANTUM OF ETF THAT SHOULD BE ASSESSED TO TAX. BESIDES THE AFORESAID ISSUE, THERE ARE CERTAIN ISSUES IN THE AP PEALS OF THE SOCIETY. WE WILL DEAL WITH THOSE ISSUES AFTER DEALING WITH THE MAJOR COMMON ISSUE. 10. THERE IS A DELAY OF ABOUT 8 DAYS IN FILING OF A PPEALS BY MJB I.E., ITA NO.90 TO 94/BANG/2012. THE REASON FOR THE DELAY I S STATED TO BE BECAUSE OF THE ASSESSEE SUFFERING SLIP DISC AND CONFINED TO BED AS PER MEDICAL ADVISE. THE CERTIFICATE OF THE MEDICAL PRACTITIONE R HAS BEEN FILED IN SUPPORT OF THE ASSESSEES CLAIM. THE DELAY IN FILING THE AP PEAL IS NOT INORDINATE OR DELIBERATE AND THE REASON GIVEN FOR THE DELAY IN OU R VIEW WOULD BE SUFFICIENT CAUSE FOR NOT FILLING THE APPEALS WITHIN TIME. WE THEREFORE CONDONE THE DELAY IN FILING THESE APPEALS. 11. ON THE AFORESAID FACTS, THE ISSUE FOR CONSIDERA TION BEFORE US IS AS FOLLOWS:- WHETHER ETF HAS TO BE ASSESSED IN THE HANDS OF THE SOCIETY OR IN THE HANDS OF MR. MJB? WHAT IS THE QUANTUM OF EFT T HAT HAS TO BE TAXED, WHETHER THE ENTIRE RECEIPT IN THE FORM OF ET F OR WHETHER ANY DEDUCTION HAS TO BE ALLOWED ON ACCOUNT OF REFUND OF ETF? 12. AFTER THE SEARCH, THE ASSESSING OFFICER ISSUED NOTICE U/S. 153A OF THE ACT FOR A.YS. 2003-04 TO 2009-10. AS PER THE P ROVISIONS OF SECTION 153A OF THE ACT, WHERE A SEARCH U/S. 132 OF THE ACT IS CARRIED OUT IN THE CASE OF A PERSON, THEN THE AO HAS TO MAKE ASSESSMEN T FOR 6 YEARS IMMEDIATELY PRECEDING THE DATE OF SEARCH. ACCORDIN GLY NOTICE U/S. 153A OF ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 8 OF 37 THE ACT WAS ISSUED TO THE SOCIETY. THE SOCIETY HAD FILED A NIL RETURN OF INCOME FOR ALL THE ASSESSMENT YEARS AS AFORESAID. ACCORDING TO THE SOCIETY, ITS INCOME AS PER ITS INCOME & EXPENDITURE ACCOUNT WAS NOT CHARGEABLE TO TAX AS IT WAS CARRYING ON CHARITABLE ACTIVITY OF PROVIDING EDUCATION AND THEREFORE ENTITLED TO THE BENEFITS OF SECTION 11 OF THE ACT. AS FAR AS THE ETF IS CONCERNED, THE SOCIETY SUBMITTED THAT IT WAS COLLECTED BY MJB FOR HIMSELF WITHOUT ANY AUTHORITY OR KNOWLEDGE OF THE SOCIETY. 13. AS FAR AS MJB IS CONCERNED, HE DID NOT DECLARE ETF IN THE ORIGINAL RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 1 53A OF THE ACT. MJB FILED A REVISED RETURN OF INCOME IN WHICH HE DECLARED ETF AS EVIDENCED AND AS CONTAINED IN THE SEIZED DOCUMENTS. HE HOWEVER CLAI MED THAT 50% OF THE ETF COLLECTED HAD BEEN REFUNDED. THUS 50% OF THE E TF AS PER SEIZED DOCUMENT WAS OFFERED TO TAX BY MJB. THE CLAIM IN T HIS REGARD WAS MADE BY MJB VIDE LETTER DATED 22.11.2010 ADDRESSED TO TH E AO. 14. IN THE ASSESSMENT OF THE SOCIETY, THE ASSESSING OFFICER REFERRED TO THE STATEMENT OF DR. R.M.O. GEMSON, PRINCIPAL OF MV J COLLEGE OF ENGINEERING RECORDED ON THE DATE OF SEARCH. THIS S TATEMENT IS GENERAL AND REFERS TO THE FACT THAT THERE WERE TWO TYPES OF ADM ISSION VIZ., (A) THROUGH CET (COMMON ENTRANCE TEST) WHICH IS GOVERNMENT ALLO TMENT, AND (B) MANAGEMENT QUOTA. THE AO THEN REFERRED TO THE STAT EMENT OF DR. RAJESHWARI, DEAN OF MVJ COLLEGE & RESEARCH HOSPITAL , RECORDED AT THE TIME OF SEARCH. IN THIS STATEMENT, SHE HAD REFERRE D TO THE FACT THAT 75 OUT OF 100 SEATS ARE TO BE FILLED UP THROUGH KARNATAKA REL IGIOUS LINGUISTIC MINORITY PROFESSIONAL COLLEGES ASSOCIATION (KRPLMPCA) THROUG H CONDUCT OF ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 9 OF 37 ENTRANCE EXAMS. THE AO THEN REFERRED TO THE STATEM ENT OF M.S. SHANTI, GUEST RELATIONS EXECUTIVE. SHE IN HER STATEMENT HA D MENTIONED THAT APART FROM TUITION FEE, EXTRA TUITION FEE (CAPITATION FEE ) WAS ALSO COLLECTED RANGING BETWEEN RS.25,000 TO RS.ONE LAKH, DEPENDING ON THE BRANCHES FOR WHICH ADMISSION WAS SOUGHT. ANOTHER STATEMENT RECO RDED WAS THAT OF MR. NAGARAJA SHETTY, OFFICE SUPERINTENDENT OF MVJ MEDIC AL COLLEGE AND RESEARCH CENTRE, HOSKOTE. HE WAS ASKED ABOUT HOW N RI QUOTAS ARE FILLED. HE FIRSTLY MENTIONED THAT WHEN ANYBODY APPROACHES H IM FOR ADMISSION, HE DIRECTS THEM TO SRI M.J. RAMANI, PRESIDENT OF THE S OCIETY. A DOCUMENT VIZ., PG. 57 OF 8/MVJ/08-09 FOUND AT THE TIME OF SEARCH W AS CONFRONTED TO HIM AND HE ADMITTED THAT THE CONTENTS OF THIS DOCUMENT WERE IN HIS HANDWRITING. HE ALSO EXPLAINED THE CONTENTS BY SAYING THAT WHEN NRI STUDENTS DO NOT APPEAR FOR ENTRANCE TEST AND SEEK ADMISSION, RS.26 LAKHS WOULD BE COLLECTED FROM THEM OVER AND ABOVE THE REGULAR FEE. IF NRI QUOTA IS NOT FILLED UP AND THE SAME IS LATER FILLED THROUGH COME D-K, RS.24 LAKHS IS COLLECTED OVER AND ABOVE THE REGULAR FEE. WHEN A S EAT IS NOT FILLED UP THROUGH KRLMPCA QUOTA AND THAT SEAT IS GIVEN TO OTH ERS THEN RS.19 LAKHS IS COLLECTED OVER AND ABOVE THE REGULAR FEE. THE A O ALSO REFERRED TO THE STATEMENT OF MR. MJB AT THE TIME OF SEARCH, WHEREIN HE HAD MENTIONED THAT CASH OF RS.1.2 CRORES FOUND AT HIS RESIDENCE WAS GI VEN TO HIM BY MR. M.J. MOHAN. 15. AFTER REFERRING TO THE ABOVE STATEMENTS, THE AO HELD THAT THE PLEA OF THE ASSESSEE THAT ETF WAS COLLECTED BY MJB ON HIS O WN WITHOUT KNOWLEDGE AND AUTHORITY OF THE SOCIETY CANNOT BE AC CEPTED AND THAT ETF WAS COLLECTED ONLY BY THE SOCIETY. THE AO ALSO REF ERRED TO SEIZED ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 10 OF 37 DOCUMENTS PERTAINING TO EACH ASSESSMENT YEAR AND CO NCLUDED THAT THE SOCIETY COLLECTED ETF. HE GAVE CREDIT FOR REFUND O F ETF TO THE EXTENT EVIDENCE WAS PRODUCED BY THE ASSESSEE. THUS ETF WA S SUBSTANTIVELY BROUGHT TO TAX IN THE HANDS OF THE SOCIETY. 16. IN THE ASSESSMENT ORDER OF MVJ, THE AO HELD THA T ETF WAS COLLECTED BY THE SOCIETY, BUT THE ETF WAS BROUGHT TO TAX IN T HE HANDS OF MJB ON A PROTECTIVE BASIS. 17. THE FOLLOWING CHART WILL SHOW THE ETF COLLECTED AND BROUGHT TO TAX, AFTER ALLOWING DEDUCTION ON ACCOUNT OF REFUND OF ET F. A.Y. ETF COLLECTED ETF CONSIDERED AS REFUNDED ETF ASSESSED ETF ADMITTED BY MJB 2005-06 1,53,08,600 NIL 1,53,08,600 77,51,078 2006-07 4,24,81,400 1,30,000 4,23,51,400 2,15,09,92 6 2007-08 5,00,80,500 2,75,000 4,98,05,500 2,53,56,85 0 2008-09 2,12,91,700 16,65,000 1,96,26,700 1,07,80,4 52 2009-10 7,53,71,119 16,50,000 7,37,21,119 3,81,02,8 61 TOTAL 20,45,53,319 37,20,000 20,08,13,319 10,35,005 01 18. IN THE ASSESSMENT OF THE SOCIETY, APART FROM MA KING ADDITION OF ETF ON A SUBSTANTIVE BASIS, THE AO ALSO BROUGHT TO TAX INCOME AS PER INCOME & EXPENDITURE ACCOUNT ON THE GROUND THAT REGISTRATION GRANTED TO THE SOCIETY U/S. 12A HAD BEEN WITHDRAWN. BUT THIS GROUND NO L ONGER SURVIVES BECAUSE THE CIT IN AN ORDER DATED 17.02.2011 GRANTED REGIST RATION TO THE SOCIETY U/S. 12A OF THE ACT, OBSERVING AS FOLLOWS:- 1. M/S VENKATESHA EDUCATION SOCIETY HAD PREFERRED AN APPLICATION ON 01.01.2002 SEEKING REGISTRATION U/S 12A OF THE IT ACT WHICH WAS REJECTED VIDE ORDER DATED 26.07.2002 OF THE DIT(EXEMPTIONS) U/S 12AA(1)(B)(II). ON APPEAL BEFOR E THE ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 11 OF 37 TRIBUNAL, THE TRIBUNAL VIDE ITS ORDER DATED 28.11.2 003 ALLOWED THE APPEAL OF THE ASSESSEE AND THEREFORE IN OBEDIEN CE OF THE ORDER OF THE ITAT, EFFECT WAS GIVEN TO THE ORDER DATED 28 .11.2003 AND REGISTRATION U/S 12AA(1)(B)(I) WAS GRANTED TO M/S V ENKATESHA EDUCATION SOCIETY W.E.F. 01.01.1999 AS A PUBLIC CHA RITABLE TRUST U/S 12AA(1)(B)(I). 2. AGAINST THE SAID ORDER OF THE ITAT, THE REVENUE PREFERRED AN APPEAL U/S 260A IN ITA NO.223/2004 AND THE HONB LE HIGH COURT OF KARNATAKA VIDE ITS ORDER DATED 31.05.2010 SET ASIDE THE ORDER DATED 28.11.2003 IN ITA NO. 1209/BANG/2002 PA SSED BY THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH, REMITTING BACK THE MATTER OF THE APPELLATE TRIBUNAL FOR FRESH CONSIDERATION. CONSEQUENT TO THE ORDER OF THE HONBLE HIGH COURT O F KARNATAKA, BANGALORE IN ITA NO.223/2004, THE REGISTRATION GRAN TED VIDE ORDER DATED 12.12.2005 WAS WITHDRAWN VIDE ORDER DAT ED 29.10.2010 OF THE COMMISSIONER OF INCOME TAX, KARNA TAKA (CENTRAL), BANGALORE. 3. THE HONBLE ITAT VIDE ITS ORDER DATED 28.01.201 1 HAS ALLOWED THE ASSESSEES APPEAL AND HAS DIRECTED TO G RANT REGISTRATION U/S 12A OF I T ACT. IN THE LIGHT OF TH E SAID ORDER, REGISTRATION IS GRANTED U/S 12AA(1)(B)(I) OF THE IN COME TAX ACT, W.E.F. 01.04.1999. 4. THE REGISTRATION U/S 12AA(1)(B)(I) OF THE I T A CT, DOES NOT AUTOMATICALLY EXEMPT THE INCOME OF THE TRUST/INSTIT UTION. THE QUESTION OF TAXABILITY OF THE INCOME OF THE TRUST/I NSTITUTION SHALL BE EXAMINED AND DECIDED UPON BY THE ASSESSING OFFIC ER (A.O.) BASED ON THE CONDUCT OF THE ACTIVITIES, COMPLIANCE WITH VARIOUS STATUTORY AND OTHER REQUIREMENTS ETC., WITHOUT PREJ UDICE TO THE FACT OF GRANTING MERE IN PRINCIPLE REGISTRATION BY THIS ORDER. 5. THE REGISTRATION U/S 12AA(1)(B)(I) OF THE I T A CT , DOES NOT AUTOMATICALLY CONFER ANY EXEMPTION OR DEDUCTION U/S 80G TO THE DONORS. BASED ON THIS ORDER, THE A.O. HAS PASSED CONSEQUENT IAL ORDERS FOR ALL THESE YEARS STARTING FROM A.Y. 2003-04 TO 2009- 10. ACCORDINGLY, THE ISSUE OF ALLOWING EXEMPTION U/S 11 BECOMES REDUNDANT AND THE APPELLANT SHOULD NOT HAVE ANY GRO USE ON THIS ISSUE. THUS THE STAND OF THE REVENUE IN DENYING THE BENEFI TS OF SEC.11 OF THE ACT ON THE GROUND THAT THE SOCIETY DOES NOT ENJOY R EGISTRATION U/S.12A OF ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 12 OF 37 THE ACT, NO LONGER SURVIVES AND CANNOT BE THE BASIS TO DENY THE BENEFITS OF SEC.11 OF THE ACT TO THE SOCIETY. 19. THE SOCIETY AS WELL AS MJB FILED APPEALS AGAINS T THE ORDER OF ASSESSMENT. THE CIT(A) ON THE ISSUE, WHETHER ETF H AS TO BE ASSESSED IN THE HANDS OF THE SOCIETY OR MJB, HELD THAT ETF HAS TO BE TAXED IN THE HANDS OF MJB. THE CIT(A) HELD THAT AGREED WITH THE STAND OF THE SOCIETY THAT THE WHOLE PROCESS OF ADMISSION WAS BEING CARRI ED OUT BY MJB AND THE TASK OF ADMISSION WAS DELEGATED TO HIM BY THE SOCIE TY AND THAT THE ROLE OF THE MANAGING COMMITTEE OF THE SOCIETY WAS TO ADMINI STER THE FUNCTIONING OF THE COLLEGES. THE CIT(A) AGREED WITH THE STAND OF THE SOCIETY ONCE THE POWERS ARE DELEGATED TO THE VARIOUS PERSONNEL THERE WAS NO DIRECT INVOLVEMENT OF THE MANAGING COMMITTEE. THE CIT(A) A LSO AGREED WITH THE STAND TAKEN BY THE SOCIETY THAT TO REGULATE THE ADM ISSION PROCESS, MJB WAS APPOINTED AND ALLOWED AUTONOMY TO CARRY OUT FUN CTIONS RELATED TO ADMISSION AND HE REGULATED AND CLOSELY CONTROLLED T HE ADMISSION PROCESS USING THE HEAD OFFICE OF THE SOCIETY. THE CIT(A) FO UND THAT MJB WAS NOT MEMBER OF THE SOCIETY AND THAT HE HAD GREAT INFLUEN CE OVER THE ADMINISTRATIVE STAFF AND HENCE HIS ACTIONS COULD NO T HAVE BEEN QUESTIONED BY ANY OF THE ADMINISTRATIVE STAFF. THE CIT(A) ALSO HELD THAT NONE OF THE SEIZED MATERIAL ESTABLISHES THE INVOLVEMENT OF THE SOCIETY IN COLLECTION OF ETF AND THAT THE COLLECTION OF ETF HAS NOT BEEN AUT HORIZED BY THE TRUSTEES/MEMBERS VIDE ANY RESOLUTION PASSED BY THEM . THE INVOLVEMENT OF THE SOCIETY OR ANY OF THE TRUSTEES/MEMBERS HAS NOT BEEN PROVED WITH THE HELP OF ANY DOCUMENTARY EVIDENCE. THE CIT(A) ALSO FOUND THAT MJB HAS COME FORWARD AND ACCEPTED THAT HE WAS RESPONSIBLE F OR COLLECTING ETF AND ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 13 OF 37 FILED RETURN OF INCOME ACCEPTING THE ETF AS RECEIVE D BY HIM. EVEN SOME OF THE AFFIDAVITS OF STUDENTS WHO AFFIRMED THAT THEY H AD GOT REFUND OF ETF, CONFIRMED THAT THE ETF WAS COLLECTED BY MJB. IN THI S REGARD THE CIT(A) ALSO FOUND THAT THESE AFFIDAVITS OF THE STUDENTS HA VE BEEN ACCEPTED BY THE ASSESSING OFFICER AS TRUE AND CORRECT AND REDUCTION ON ACCOUNT OF REFUND OF ETF RECEIPT HAS BEEN ALLOWED BY THE ASSESSING OFFIC ER TO A CERTAIN EXTENT ( 37,20,000/- FOR ALL THE FIVE YEARS) IN THE ASSESSME NT ORDER. THE CIT(A) WAS OF THE VIEW THAT THE ASSESSING OFFICER HAVING ACCEP TED SUCH AFFIDAVITS, CANNOT HOLD THAT THE ETF WAS NOT RECEIVED BY MJB AN D THAT IT WAS THE SOCIETY WHICH RECEIVED ETF. THE CIT(A) ALSO NOTICED THE CIRCUMSTANCE THAT CASH BAG CONTAINING RS. 1.20 CRORE FOUND DURING THE COURSE OF SEARCH WAS CONTAINING A SLIP STATING THAT THE AMOUNT WAS HANDE D OVER TO SRI M J BALACHANDER. HE HELD THAT THE DIRECT EVIDENCE FOUN D DURING THE COURSE OF SEARCH LEADS TO THE CONCLUSION THAT THE ETF WAS COL LECTED BY MJB. WITH REGARD TO THE STATEMENT OF MJB AT THE TIME OF SEARC H IN HIS PREMISES WHICH WAS TO THE EFFECT THAT THE CASH BAGS WERE GIVEN BY HIS BROTHER, DR. MOHAN, THE CIT(A) WAS OF THE VIEW THAT MJB VIDE LETTER DAT ED 22.11.2010, HAD CLARIFIED TO THE ASSESSING OFFICER THAT THE SOCIETY OR ANY OF ITS MEMBERS HAD NEVER DIRECTED SRI M J BALACHANDER TO COLLECT ETF A ND AS SUCH, THEY WERE NOT INVOLVED IN COLLECTION OF ETF. IT WAS FURTHER S TATED BY MJB THAT THE ETF WAS COLLECTED SOLELY AT HIS DISCRETION. THE CIT(A) WAS THEREFORE SATISFIED THAT THE STATEMENT OF MJB AT THE TIME OF SEARCH ON 16.09.2008 HAS BEEN DULY EXPLAINED. ANOTHER REASON GIVEN BY CIT(A) FOR COMING TO THE CONCLUSION THAT ETF WAS COLLECTED BY MJB AND NOT BY THE SOCIETY WAS THE CIRCUMSTANCE THAT DURING THE COURSE OF SEARCH, SRI M J BALACHANDER WAS ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 14 OF 37 FOUND TO BE IN POSSESSION OF CASH OF RS. 1,20,95,90 0/- AND ALSO CERTAIN BULLION, ETC. THE ASSESSING OFFICER IN THE ASSESSME NT OF MJB HELD THAT ALL THESE ASSETS FOUND IN THE COURSE OF SEARCH BELONG T O MJB AND THEY WERE NOT ACCOUNTED FOR BY HIM IN HIS BOOKS OF ACCOUNTS. HOWEVER, THE ASSESSING OFFICER DID NOT MADE ANY ADDITION ON ACCOUNT OF OTH ER ASSETS FOUND AT THE TIME OF SEARCH OF MJB FOR THE REASON THAT SOURCE OF FUNDS OF THE UNEXPLAINED ASSETS FOUND AT THE TIME OF SEARCH WAS ETF COLLECTED BY MJB AND THAT THE VALUE OF THE ASSETS FOUND WAS LESS THA N THE ETF COLLECTED BY MJB. THIS CIRCUMSTANCE ACCORDING TO THE CIT(A) ALSO SUPPORTED THE VIEW THAT ETF WERE COLLECTED BY MJB. 20. ON THE ISSUE OF QUANTUM OF ETF CLAIMED TO HAVE BEEN REFUNDED BY MJB AND THE AMOUNT OF ETF THAT HAS TO BE BROUGHT TO TAX IN THE HANDS OF MJB, THE CIT(A) FIRSTLY EXAMINED THE QUESTION WHETH ER ETF WAS REFUNDABLE IN NATURE. ON THE ABOVE QUESTION, THE CIT(A) FOUND THAT OUT OF THE TOTAL ADDITIONS PERTAINING TO THE ETF IN FIVE YEARS PUT T OGETHER AMOUNTING TO Q 20,44,15,447/-, THE A.O. HAD ALLOWED REFUNDS AMOUNT ING TO Q 37,20,000/- AND THE BREAK-UP FOR THE FIVE YEARS WERE AS UNDER:- A.Y. ETF COLLECTED ETF CONSIDERED AS REFUNDED ETF ASSESSED ETF ADMITTED BY MJB 2005-06 1,53,08,600 NIL 1,53,08,600 77,51,078 2006-07 4,24,81,400 1,30,000 4,23,51,400 2,15,09,92 6 2007-08 5,00,80,500 2,75,000 4,98,05,500 2,53,56,85 0 2008-09 2,12,91,700 16,65,000 1,96,26,700 1,07,80,4 52 2009-10 7,53,71,119 16,50,000 7,37,21,119 3,81,02,8 61 TOTAL 20,45,53,319 37,20,000 20,08,13,319 10,35,005 01 ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 15 OF 37 THE CIT(A) ACCEPTED THE PLEA THAT THERE WERE CIRCUM STANCES IN WHICH STUDENTS LEAVE THE COLLEGE IN THE MIDDLE OF THE COU RSE, VIZ., (I) WHEN THEY GET ADMISSION IN A MUCH BETTER COLLEG E, THEY FOREGO THE AMOUNT PAID AND JOIN THE OTHER COLLEGES. (II) WHEN THEY FAIL TO CLEAR SPECIFIC NUMBER OF PAP ERS AND WHEN CARRY OVER TO THE NEXT YEAR IS NOT ALLOWED, WHICH R ESULTS IN THEIR SEAT REMAINING VACANT. (III) WHEN BRIGHT STUDENTS TAKE EXAMS OF IITS, NTT S AND CLEAR IT, THEY LEAVE THE COLLEGE MID COURSE, EVEN IF THEY HAVE COMPLETED ONE OR TWO SEMESTERS. IT IS BECAUSE OF THE ABOVE REASONS THAT ETF ON THE BASIS OF PAST EXPERIENCE WAS BEING COLLECTED BY MJB. ETF WAS TO BE REFUNDED TO THE STUDENTS WHEN IT BECOMES FAIRLY CERTAIN THAT THEY W ILL CONTINUE THEIR STUDIES IN THE COLLEGES OF THE SOCIETY OR WHEN THEY LEAVE THE COLLEGE AND TAKE ADMISSION ELSEWHERE. THIS WAY THE SOCIETY WIL L HAVE A TRACK OF THE SEATS THAT CAN BE FURTHER FILLED UP BY ADMISSION OF OTHER STUDENTS IN PLACE OF STUDENTS WHO HAVE TAKEN ADMISSION BUT LEFT THE C OLLEGE. IN VIEW OF THE ABOVE CIRCUMSTANCES, THE CIT(A) HELD THAT ETF W AS REFUNDABLE BUT SOME AMOUNT HAD BEEN RETAINED BY MJB WHICH HAS RESU LTED IN UNACCOUNTED INCOME OF MJB. IN VIEW OF THE SAME, TH E STAND OF MJB THAT ENTIRE ETF WAS REFUNDABLE WAS HELD TO BE NOT A CCEPTABLE AND ONLY A PORTION OF IT WAS HELD TO BE SPENT/REFUNDED. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 16 OF 37 21. ON THE ISSUE WHETHER THE ENTIRE ETF HAS TO BE TAXED IN THE HANDS OF MJB OR WHETHER ONLY A PART THEREOF HAS TO BE TAXED , THE CIT(A) FOUND THAT MJB ON HIS OWN HAS OFFERED 50% OF THE ETF COLLECTED AND EVIDENCED BY SEIZED DOCUMENTS VIZ., Q 10,35,00,500/- HAS ACCEPTED AS HIS INCOME OUT OF GROSS COLLECTIONS OF Q 20,45,33,319/-. THE CIT(A) ALSO FOUND THAT THE A.O. HIMSELF HAS ACCEPTED Q 37,20,000/- AS REFUNDED FOR THE FIVE YEARS BY MJB. HE WAS OF THE VIEW THAT MJB COULD NOT FURNISH THE ENTIRE DETAILS OF ETF REFUNDED AND EXPE NSES INCURRED. NEVERTHELESS THE CIT(A) WAS OF THE VIEW THAT THE EN TIRE ETF COLLECTIONS CANNOT BE BROUGHT TO TAX AS INCOME OF MJB. BEFORE CIT(A) MJB FILED FURTHER AFFIDAVITS FROM STUDENTS TO THE EFFECT THAT ETF WAS REFUNDED BY MJB TO HIM. THE VALUE OF ETF SO REFUNDED FOR THE E NTIRE PERIOD IN DISPUTE WAS RS.2 CRORE. THE CIT(A) NOTICED THAT TH OUGH ETF COLLECTED OVER THE YEARS WAS Q 20,44,15,447/-, NO SUCH CORRESPONDING CASH OR INVESTMENT HAVE BEEN FOUND BY THE DEPARTMENT DURING THE COURSE OF SEARCH. THIS ACCORDING TO HIM CLEARLY SHOWED THAT T HE AMOUNT OF ETF AS ESTIMATED BY THE ASSESSING OFFICER WAS NEVER AVAILA BLE IN THE POSSESSION OF MJB SINCE MOST OF THE AMOUNT WAS ALREADY REFUNDE D TO THE RESPECTIVE STUDENTS. THE CIT(A) NOTICED THAT MJB HAD ON HIS OW N OFFERED TO TAX AS INCOME TO BUY PEACE, 50% OF THE ETF COLLECTED IN TH E RESPECTIVE YEARS. TAKING INTO CONSIDERATION THE ABOVE CIRCUMSTAN CES, THE CIT(A) WAS OF ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 17 OF 37 THE VIEW THAT TAXING THE ENTIRE AMOUNT OF ETF WOULD NOT BE CORRECT. SINCE THERE WAS NO DIRECT EVIDENCE OF WHAT WAS THE QUANTUM OF ETF REFUNDED, THE CIT(A) HELD THAT THE QUANTUM OF ETF R ECEIPT NOT REFUNDED WAS REQUIRED TO BE ESTIMATED CONSIDERING THE TOTALI TY OF THE FACTS AND CIRCUMSTANCES. HE FOUND THAT MJB THAT THE TOTAL ASS ETS FOUND DURING THE COURSE OF SEARCH OF MJB WAS 9% OF THE TOTAL ETF COL LECTIONS. AS AGAINST THAT, HE HIMSELF HAS OFFERED 50% OF ETF AMOUNT FOR THE PURPOSE OF TAXATION. CONSIDERING THE FACTS OF THE CASE IN TOTA LITY AND ABSENCE OF ANY COMMENSURATE ASSET, THE CIT(A) HELD THAT 60% OF THE YEAR WISE GROSS ETF RECEIPTS SHOULD BE TAXED IN THE HANDS OF MJB A ND THAT WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, 60% OF THE ETF WA S DIRECTED TO BE TAXED YEAR WISE IN THE HANDS OF MJB BY REDUCING 40% OF THE ETF TOWARDS REFUNDED AMOUNT AND EXPENSES. 22. AGGRIEVED BY THE ORDER OF THE CIT(A) HOLDING T HAT (I) ETF HAS TO BE ASSESSED IN THE HANDS OF MJB ON SUBSTANTIVE BASIS A ND (II) ONLY 60% OF THE ETF COLLECTED HAS TO BE ASSESSED IN THE HANDS O F MJB, THE REVENUE HAS FILED APPEALS IN THE CASE OF MJB WHICH ARE ITA NOS.95 TO 99/BANG/2012 FOR THE A.Y. 2005-06 TO 2009-10. 23. AGGRIEVED BY THE ORDER CIT(A) HOLDING THAT 60% OF ETF IS TO BE TAXED IN THE HANDS OF MJB AS AGAINST MJBS CLAIM TH AT ONLY 50% OF ETF IS TO BE TAXED, MJB HAS FILED APPEALS FOR AY 2005-06 T O 2009-10 WHICH ARE ITA NOS.90 TO 94/BANG/2012. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 18 OF 37 24. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR. THE LD. COUNSEL REPRESENTING MJB AND THE LD. COUNSEL REPRESENTING T HE SOCIETY. WE ALSO HAD THE BENEFIT OF LOOKING INTO THE DOCUMENTS SEIZE D AT THE TIME OF SEARCH, BASED ON WHICH THE AO MADE SUBSTANTIVE ASSESSMENT I N THE HANDS OF THE SOCIETY. 25. THE LD. DR SUBMITTED THAT IT WAS THE SOCIETY T HAT WAS COLLECTING ETF AND IN THIS REGARD REFERRED TO THE SEIZED DOCUMENTS . IT WAS SUBMITTED THAT IT WAS PURELY AN AFTERTHOUGHT ON THE PART OF THE SOCIE TY TO DISOWN COLLECTION OF ETF AND ATTRIBUTE THE SAME TO HAVE BEEN COLLECTED B Y MJB, WHO IS NOT A MEMBER OF THE COMMITTEE OF THE SOCIETY. ACCORDING TO HIM, THE PLEA HAS BEEN TAKEN ONLY FOR THE PURPOSE OF AVOIDING THE CON SEQUENCES OF BEING DERECOGNIZED BY THE STATE GOVERNMENT FOR HAVING TAK EN CAPITATION FEE. IN THIS REGARD, HE ALSO SUBMITTED THAT THE SOCIETY HAS APPARENTLY TAKEN NO ACTION AGAINST MJB AND THIS CIRCUMSTANCE BY ITSELF GOES TO SHOW THAT THE PLEA OF THE SOCIETY CANNOT BE ACCEPTED. 26. THE LD. DR REFERRED TO SEIZED DOCUMENT A/15/MV JCB RELEVANT TO AY 2005-06 WHEREIN A COMPREHENSIVE BREAK-UP OF THE ETF AND NORMAL TUITION FEE HAS BEEN GIVEN. ACCORDING TO HIM, SUCH DETAILS WOULD NOT BE MAINTAINED IF MJB WAS COLLECTING ETF WITHOUT THE KN OWLEDGE AND CONSENT OF THE SOCIETY. HE ALSO DREW OUR ATTENTION TO SEIZ ED DOCUMENT A/14/MVJE (PAGE 54 AND PAGE 99 OF A/18/MVJE) WHICH REFERS TO THE FACT THAT ETF COLLECTED IN CASH WAS DEPOSITED IN THE H.O. I.E., T HE SOCIETY THROUGH DIFFERENT PERSONS OF THE SOCIETY VIZ., MS. KAVITHA PRASAD, MOHAN SECRETARY OF THE SOCIETY, INDIRA AND OTHERS. THE D OCUMENTS ARE RELEVANT TO ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 19 OF 37 AY 2006-07 & 2007-08. ACCORDING TO HIM, THESE DOCU MENTS WHICH ARE RELEVANT FOR AY 2006-07 ALSO GOES TO SHOW THAT IT W AS THE SOCIETY WHICH WAS COLLECTING AND APPROPRIATING ETF. THE LD. DR D REW OUR ATTENTION TO THE STATEMENT OF MJB AT THE TIME OF SEARCH WHEREIN HE H AD STATED THAT MR. MOHAN HAD GIVEN CASH FOUND AT THE TIME OF SEARCH AN D THAT THE SAME WAS TUITION FEE COLLECTED FROM STUDENTS. A REFERENCE W AS ALSO MADE TO A/14/MVJB (PAGE 56) RELEVANT TO AY 2006-07, WHEREIN THE FACT THAT ETF COLLECTED WAS DEPOSITED IN THE HEAD OFFICE I.E., TH E SOCIETY HAS BEEN MENTIONED. IT WAS POINTED OUT IN SOME OF THE SEIZE D DOCUMENTS THERE WAS A REFERENCE TO THE SECRETARY DEPOSITING ETF IN THE HEAD OFFICE. IT WAS SUBMITTED THAT THIS CIRCUMSTANCE ALSO GOES TO SHOW THAT THE SECRETARY WAS AWARE OF THE COLLECTION OF ETF AND THAT ETF WAS IN FACT COLLECTED BY THE SOCIETY. 27. THE OTHER REASONS GIVEN BY THE AO WERE REITERA TED BY THE LD. DR. IT WAS SUBMITTED THAT THE ACT OF COLLECTING CAPITATION FEE BY THE SOCIETY WOULD ONLY SHOW THAT IT DID NOT EXIST FOR A CHARITABLE PU RPOSE AND THEREFORE THE BENEFIT OF EXEMPTION U/S. 11 OF THE ACT SHOULD ALSO BE DENIED TO THE SOCIETY. IT WAS ALSO ARGUED THAT ACTS DONE BY A SERVANT IN T HE COURSE OF PERFORMING HIS DUTIES BINDS THE MASTER. IT WAS ARGUED THAT MJ B, AN EMPLOYEE COLLECTING ETF, EVEN IF HELD TO BE TRUE, WILL BIND THE MASTER VIZ., THE SOCIETY AND THEREFORE ETF IS DEEMED TO HAVE BEEN COLLECTED BY THE SOCIETY. 28. THE LD. COUNSEL FOR THE ASSESSEE I.E., MJB, SU BMITTED THAT THE SOCIETY DELEGATED POWERS OF ADMISSION TO MJB. MJB WAS THE BROTHER OF THE PRESIDENT OF THE SOCIETY AND THEREFORE THE STAF F MEMBERS DID NOT DOUBT ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 20 OF 37 OR QUESTION HIS ACTIONS. IT WAS FURTHER SUBMITTED THAT NONE OF THE SEIZED MATERIAL SHOWS THAT ETF WAS COLLECTED BY THE SOCIET Y. IT WAS SUBMITTED THAT THE INVOLVEMENT OF THE MEMBERS OF THE MANAGING COMMITTEE OF THE SOCIETY HAS NOT BEEN ESTABLISHED BY THE REVENUE NOR DO THE SEIZED DOCUMENTS SHOW THAT THERE WAS ANY INVOLVEMENT BY TH E MEMBERS OF THE MANAGING COMMITTEE OF THE SOCIETY. IT WAS SUBMITTE D THAT MJB ON HIS OWN CAME FORWARD AND ACCEPTED THAT HE HAD COLLECTED THE ETF. IT WAS ALSO SUBMITTED THAT MJB WAS ABLE TO GET AFFIDAVITS THAT ETF WERE REFUNDED BY HIM TO THE TUNE OF RS.37.20 LAKHS. IT WAS POINTED OUT THAT THE FACTUM OF MJB HAVING REFUNDED THE ETF TO SOME OF THE STUDENTS HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER AND THE AO HAS GI VEN DUE CREDIT TO THOSE REFUNDS AND HAS EXCLUDED WHILE TAXING ETF, THE AMOU NTS REFUNDED BY MJB. IT WAS SUBMITTED THAT AT THE TIME OF SEARCH IN RESI DENTIAL PREMISES OF MJB, CASH OF RS.1.20 CRORES WAS FOUND FROM HIS POSSESSIO N. IT WAS SUBMITTED THAT THIS FACT GOES TO SHOW THAT IT WAS MJB WHO WAS COLLECTING THE ETF. IT WAS SUBMITTED THAT IN THE STATEMENT RECORDED U/S. 1 32(4) OF THE ACT, THE ASSESSEE HAD STATED THAT CASH OF RS.1.20 CRORES WAS HANDED OVER BY MR. MOHAN TO HIM. ON THIS ASPECT, THE LD. COUNSEL SUBM ITTED THAT IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ADDRESSED A LE TTER DATED 22.11.2010 TO THE AO IN WHICH HE HAD EXPLAINED THAT THE ENTIRE ETF WAS COLLECTED BY HIM WITHOUT AUTHORITY OF THE MANAGING COMMITTEE OF THE SOCIETY. IT WAS POINTED OUT THAT MJB CONFESSED HAV ING TAKEN THE LIBERTY OF COLLECTING THE ETF ON HIS OWN, WITHOUT THE KNOWLEDG E AND DIRECTIONS OF THE MANAGING COMMITTEE OF THE SOCIETY. ANOTHER CIRCUMST ANCE POINTED OUT BY THE LD. COUNSEL FOR MJB WAS THE FACT THAT ALONG WIT H THE CASH OF RS.1.20 ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 21 OF 37 CRORES FOUND AT THE TIME OF SEARCH AT MJBS RESIDEN CE, THERE WAS A PAPER CONTAINING THE WORDS HANDED OVER TO BALACHANDER SI R. REFERRING TO THE AFORESAID DOCUMENT, THE LD. COUNSEL FOR MJB SUBMITT ED THAT IF THE CASH HAD BEEN GIVEN BY THE ASSESSEES ELDER BROTHER MR. MOHA N, THEN THE DESCRIPTION IN THE LOOSE PAPER FOUND ALONG WITH THE CASH COULD NOT READ AS CASH GIVEN TO M.J. BALACHANDER SIR. 29. WITH REGARD TO THE QUANTUM OF ETF REFUNDED BY MJB, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS NOT POSSIBLE FOR MJB TO GET CONFIRMATION FROM ALL THE STUDENTS TO WHOM HE HAD R EFUNDED THE ETF. OUR ATTENTION WAS DRAWN TO THE LETTER DATED 22.11.2010 FILED BEFORE THE AO IN WHICH THE ASSESSEE HAS EXPLAINED THAT THE CONFIRMAT IONS PRODUCED IN THE FORM OF AFFIDAVITS OF SOME OF THE STUDENTS SHOULD B E ACCEPTED AND THAT THE ASSESSEE WILL MAKE ALL ENDEAVOUR TO GET SUCH AFFIDA VITS FROM THE OTHER STUDENTS WHO WERE ALSO REFUNDED THE ETF. IT WAS PO INTED OUT THAT TAKING INTO CONSIDERATION THE DIFFICULTIES IN PROCURING TH E AFFIDAVITS FROM STUDENTS TO WHOM ETF WAS REFUNDED; THE ASSESSEE VOLUNTARILY OFF ERED 50% OF ETF FOR TAXATION. IT WAS ARGUED THAT SUCH DISCLOSURE WAS S UFFICIENT TO TAKE CARE OF ANY INCOME ARISING OUT OF ETF AND NO FURTHER ADDITI ON IS REQUIRED IN RESPECT OF ETF. IN THIS REGARD, THE LD. COUNSEL FOR THE AS SESSEE ALSO POINTED THAT OUT OF THE TOTAL ETF AS PER THE SEIZED MATERIAL OF ABOUT Q 120 CRORES, Q 1.2 CRORES WAS FOUND IN THE FORM OF CASH AT THE TIME OF SEARCH. APART FROM THE ABOVE, BULLION WORTH Q 24,20,000 WAS FOUND. MJB ALSO OWNED CASH OF Q 41,43,808 FOUND IN THE OFFICE AT THE TIME OF SEARCH . THUS, THE TOTAL ASSETS THAT WERE FOUND AT THE TIME OF SEARCH WHICH CAN BE ATTRIBUTED TO THE ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 22 OF 37 OWNERSHIP OF MJB WAS ONLY WORTH Q 1,86,60,000. THUS, THERE WAS SURPLUS OF Q 18.57 CRORES OUT OF THE ETF WHICH WAS AVAILABLE AT THE HANDS OF MJB. IT WAS SUBMITTED THAT THE ASSETS FOUND AT THE TIME OF SEARCH WAS 9% OF THE TOTAL COLLECTIONS IN THE FORM OF ETF BY MJB. ACCOR DING TO THE LD. COUNSEL FOR THE ASSESSEE, THIS CIRCUMSTANCE WOULD ALSO GO TO SH OW THAT MJB WOULD HAVE REFUNDED 50% OF THE ETF. 30. THE LD. COUNSEL FOR THE SOCIETY RELIED ON THE O RDER OF THE CIT(APPEALS) AND IN ALL OTHER RESPECTS REITERATED T HE STAND AS WAS TAKEN BY MJB. IN PARTICULAR, IT WAS SUBMITTED THAT NONE OF THE SEIZED DOCUMENTS SHOW THAT ETF COLLECTED WAS THE COLLECTION AUTHORIZ ED BY THE SOCIETY. ON THE OTHER HAND, THE FACT THAT MJB ACCEPTED THAT HE HAD COLLECTED ETF ON HIS OWN WITHOUT ANY AUTHORITY BY THE COMMITTEE OF T HE SOCIETY ONLY GOES TO SHOW THAT THE SOCIETY HAS NOTHING TO DO WITH THE ET F SAID TO HAVE BEEN COLLECTED BY MJB. IT WAS SUBMITTED THAT THE AOS O BSERVATION THAT ACTS OF THE EMPLOYEES WILL BE BINDING ON THE MASTER, CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE FOR THE REASON THAT MJB WAS NEV ER AUTHORIZED TO COLLECT THE ETF. THE AUTHORITY TO COLLECT ETF SHOULD HAVE BEEN GIVEN BY THE SOCIETY, IT IS ONLY THEN THAT IT CAN BE SAID THAT T HE ACTS OF THE EMPLOYEE WILL BIND THE PRINCIPAL. IT WAS SUBMITTED THAT ANYTHING DONE BY THE EMPLOYEE BEYOND THE SCOPE OF THE POWERS GIVEN TO HIM WILL NO T BIND THE SOCIETY. 31. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. FOR DECIDING THE CONTROVERSY AS TO WHETHER THE ETF HAS TO BE ASSESSED IN THE HANDS OF THE SOCIETY OR IN THE HANDS OF MJB, IT IS NECESSARY TO HAVE A ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 23 OF 37 LOOK AT THE SEIZED DOCUMENTS. IN THE A.Y. 2005-06, THE AO FOR MAKING THE ADDITION ON ACCOUNT OF ETF HAS PLACED RELIANCE ON A /15/MVJCE, PAGES 37 TO 39 OF THE SEIZED DOCUMENTS. PAGE 39 IS A LETTER WRITTEN BY ONE KAVITHA PRASAD IN WHICH KAVITHA PRASAD HAS MENTIONED THAT S HE IS GIVING THE DETAILS OF ADMISSIONS DONE IN THE COLLEGE FOR THE A CADEMIC YEAR 2004-05. SHE HAS ALSO MENTIONED THAT THE TOTAL COLLECTIONS I N CASH AND DD WAS A SUM OF Q 3,18,39,540. THE DETAILS OF THE DDS DEPOSITED IN BANK AND CASH DEPOSITED IN THE HEAD OFFICE ARE ALSO GIVEN IN THE SAID LETTER. IT IS VERY IMPORTANT TO NOTE THAT THIS LETTER IS ADDRESSED TO MJB (PAGES 37 AND 38 OF THE SEIZED DOCUMENTS) AND GIVES A BREAK-UP OF A SU M OF Q 3,18,39,540 REFERRED TO BY KAVITHA PRASAD IN THE LETTER. IT IS PERTINENT TO MENTION THAT THE BREAK-UP GIVEN ALONG WITH THIS LETTER IS IN THE FOR M OF A TABLE IN WHICH THE BI- FURCATION OF THE SUMS WHICH ARE RECEIVED BY CASH AN D WHICH ARE RECEIVED BY DD ARE GIVEN. FURTHER, THE AGREED TUITION FEE A ND AGREED EXTRA TUITION FEE (ETF) IS ALSO GIVEN IN THIS TABLE. THE TABLE A LSO GIVES THE ETF THAT HAS ALREADY BEEN COLLECTED AND THE AMOUNT DUE TO BE COL LECTED FROM THE STUDENTS ON ACCOUNT OF ETF. IN PAGES 37 AS WELL AS PAGE 35 OF THE SEIZED PAPERS, THERE IS A REFERENCE TO CASH HAVING BEEN DE POSITED IN THE HEAD OFFICE. IT IS NOT CLEAR AS TO HOW A REFERENCE TO C ASH HAVING BEEN DEPOSITED IN THE HEAD OFFICE SHOULD BE TREATED AS FUNDS COLLE CTED BY THE SOCIETY. IN THIS REGARD, WE FIND THAT THE AUTHOR OF THE LETTER VIZ., KAVITHA PRASAD HAS NOT BEEN EXAMINED BY THE AO TO PROVE THE FACT THAT CASH DEPOSITED IN HEAD OFFICE MEANS THAT THE CASH HAS BEEN DEPOSITED WITH THE SOCIETY. ON THE OTHER HAND, THE FACT THAT THIS LETTER IS ADDRESSED TO MJB ONLY GOES TO SHOW ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 24 OF 37 THAT THE MONEY IN QUESTION WAS GIVEN TO MJB. FURTH ER THE SHEET ANNEXED WITH PAGE 35 OF A/15/MVJCE IS AN ABSTRACT OF FEES C OLLECTED AND DEPOSITED AFTER CANCELLATIONS. THIS HAS A HEADING MVJ COLLE GE OF ENGINEERING. IT IS NOT IN DOUBT OR DISPUTE THAT MJB WAS THE PERSON MAN AGING THE AFFAIRS OF MVJ ENGINEERING COLLEGE. IT CAN THUS BE SAFELY SAI D THAT THE INVOLVEMENT OF THE SOCIETY IN THE COLLECTION OF ETF ON THE BASI S OF THE SEIZED MATERIAL A/15/MVJCE (PAGES 37, 38 & 39) HAS NOT BEEN FULLY E STABLISHED. IN THESE CIRCUMSTANCES, WE ARE LEFT WITH NO OTHER OPTION, BU T TO ACCEPT THE PLEA PUT FORTH BY MJB THAT HE WAS COLLECTING THE ETF WITHOUT THE KNOWLEDGE OF THE SOCIETY. IN THIS REGARD, WE ALSO FIND THAT IN THE STATEMENT RECORDED U/S. 132(4) OF THE ACT THAT MJB INITIALLY CLAIMED THAT T HE SUM OF Q 1.2 CRORES FOUND IN HIS RESIDENCE WAS GIVEN TO HIM BY HIS BROT HER, M.J. MOHAN. THIS STATEMENT OF MJB GOES CONTRARY TO THE LOOSE SHEETS FOUND ALONG WITH THE CASH IN WHICH THE DESCRIPTION IS CASH GIVEN TO M.J . BALACHANDER SIR. AS RIGHTLY CONTENDED ON BEHALF OF THE SOCIETY, IF THE MONEY WAS GIVEN BY M.J. MOHAN TO MJB, THEN THE DESCRIPTION COULD NOT HAVE B EEN M.J. BALACHANDER SIR. MR. MOHAN HAPPENS TO BE ELDER BROTHER OF MJB AND IT IS NOT POSSIBLE THAT THE DESCRIPTION IN THE LOOSE SHEET FOUND ALONG WITH THE CASH WOULD BE M.J. BALACHANDER SIR. THE DESCRIPTION ONLY SUGGE STS THAT CASH HAS BEEN HANDED OVER BY SOME OF THE STAFF MEMBERS OF THE COL LEGE. AS ALREADY STATED, THERE IS NOTHING TO SUGGEST THAT ETF AS REF LECTED IN THE SEIZED DOCUMENTS REFERRED TO BE THE AO IN ORDER OF ASSESSM ENT FOR THE A.Y. 2005- 06 HAS ANY CONNECTION WITH THE SOCIETY. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 25 OF 37 32. AS FAR AS A.Y. 2006-07 IS CONCERNED, THE AO WH ILE MAKING THE ADDITION ON ACCOUNT OF ETF IN THE HANDS OF THE SOCI ETY HAS PLACED RELIANCE ON THE SEIZED DOCUMENTS A/14/MVJCE (PAGES 50 TO 56) . PAGE 56 OF THE SEIZED DOCUMENTS IS A LETTER WRITTEN BY ONE INDIRA DEVI TO MJB. THIS LETTER AGAIN GIVES A BREAK-UP OF THE COLLECTIONS IN CASH A S WELL AS IN DD. IN THIS LETTER ALSO, THERE IS A REFERENCE TO CASH DEPOSITED IN THE HEAD OFFICE AS IN THAT A.Y. 2005-06. THIS SEIZED DOCUMENT ALSO GIVES A BREAK-UP OF THE AGREED TUITION FEE AND THE EXTRA TUITION FEE (ETF) AND ALSO THE BALANCE TO BE COLLECTED. APART FROM THE ABOVE, PAGE 54 OF THE SEIZED DOCUMENTS ALSO GIVES THE DETAILS OF THE DEPOSIT OF CASH IN THE HEA D OFFICE THROUGH WHOM. E.G., ON 25.05.2005, CASH DEPOSITED IN THE HEAD OFF ICE IS STATED TO BE IN A SUM OF Q 5,69,000 AND THAT THE SAME HAS BEEN DEPOSITED IN T HE HEAD OFFICE THROUGH MS. KAVITHA PRASAD. IN THIS DESCRIP TION, WHICH HAS A TOTAL OF ABOUT 29 DIFFERENT DATES, THERE IS A REFERENCE TO T HE CASH HAVING BEEN DEPOSITED IN THE HEAD OFFICE THROUGH SECRETARY SIR , ON THREE INSTANCES I.E., ON 02.06.05, 08.09.05 AND 19.10.05. 33. BASED ON THE ABOVE ENTRIES IN THE SEIZED DOCUME NTS, THE LD. DR CONTENDED BEFORE US THAT THE SECRETARYS INVOLVEMEN T IN THE COLLECTION OF CASH AND DEPOSITED IN THE HEAD OFFICE IS PROVED BY THE SEIZED DOCUMENTS. IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE BR OUGHT TO OUR NOTICE THAT THE AGREED TUITION FEE WHICH THE SOCIETY CAN COLLEC T FOR ADMISSION HAS ALSO BEEN COLLECTED AND THIS IS DULY REFLECTED IN THE ST ATEMENT FOUND IN THE SEIZED DOCUMENTS. IT WAS SUBMITTED THAT THE TOTAL COLLECTIONS IN THE FORM OF DD WAS A SUM OF Q 1,16,74,975 AND THE AMOUNT STATED TO HAVE BEEN ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 26 OF 37 DEPOSITED BY THE SECRETARY IN THE HEAD OFFICE IS ON LY A SUM OF Q 80,000 ON 02.06.2005 AND Q 14,33,500 ON 19.10.05. IT WAS SUBMITTED THAT THE REFERENCE IN THE SEIZED DOCUMENT MIGHT BE WITH REGA RD TO THE NORMAL TUITION FEE WHICH THE SOCIETY CAN COLLECT. IT WAS SUBMITTE D THAT THE ENTRIES IN PAGE 54 CANNOT BE CONCLUSIVE TO SHOW THAT THE SECRETARY WAS ALSO INVOLVED IN COLLECTING THE ETF. WE ARE OF THE VIEW THAT THE SU BMISSIONS MADE ON BEHALF OF THE ASSESSEE IN THIS REGARD APPEAR TO BE CONVINCING. IN THIS REGARD, WE ALSO FIND THAT INDIRA DEVI, WHO IS STATE D TO HAVE WRITTEN LETTER DATED 08.12.07, HAS NOT BEEN EXAMINED BY THE ASSESS ING OFFICER. IN THOSE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE SEIZED DO CUMENT ON WHICH THE AO HAS PLACED RELIANCE CONCLUSIVELY PROVES THAT IT WAS ONLY THE SOCIETY WHICH RECEIVED THE ETF. ON THE OTHER HAND, THE CIRCUMSTA NCES POINTED OUT BY THE SOCIETY ONLY GO TO SHOW THAT IT WAS MJB WHO WAS COL LECTING ETF WITHOUT THE KNOWLEDGE AND AUTHORITY OF THE SOCIETY. 34. AS FAR AS A.Y. 2007-08 IS CONCERNED, THE ASSES SING OFFICER WHILE MAKING THE ADDITION IN THE HANDS OF THE SOCIETY, HA S PLACED RELIANCE ON THE SEIZED DOCUMENT A/18/MVJCE (PAGES 101 TO 107). PAG E 101 IS A LETTER WRITTEN BY INDIRA DEVI TO MJB AND THIS LETTER IS AL MOST ON IDENTICAL LINES WHICH WE HAVE DISCUSSED IN A.Y. 2006-07. THIS LETT ER HAS AS ITS ANNEXURE THE BREAK-UP OF THE AMOUNTS REFERRED TO IN THE LETT ER AT PAGE 101 OF THE SEIZED DOCUMENTS. THIS LETTER ALSO HAS A DESCRIPTI ON THAT 4 PAYMENTS HAD BEEN MADE TO THE HEAD OFFICE THROUGH THE SECRETARY. IN THIS REGARD, AS WE HAVE ALREADY OBSERVED WHILE DEALING WITH THE CASE O F THE SOCIETY FOR THE A.Y. 2006-07, THAT THE LEGITIMATE TUITION FEE WHICH THE SOCIETY CAN COLLECT ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 27 OF 37 AND WHICH HAS BEEN COLLECTED IS TO THE TUNE OF Q 5,26,63,500. THE AMOUNT STATED TO HAVE BEEN DEPOSITED IN THE HEAD OFFICE TH ROUGH THE SECRETARY IS A SUM OF Q 35,53,000 ON 24.06.2006, A SUM OF Q 49,21,000 ON 01.07.2006, A SUM OF Q 66,67,600 ON 15.07.2006 AND ANOTHER SUM OF Q 51,11,500 ON 19.07.2006. THUS, THE TOTAL AMOUNTS REFERRED TO IN THIS LOOSE SHEET VIZ., PAGE 99 IS LESS THAN THE LEGITIMATE TUITION FEE WHI CH THE SOCIETY CAN COLLECT AND WHICH HAS BEEN COLLECTED BY THE SOCIETY. IN TH ESE CIRCUMSTANCES, NO ADVERSE INFERENCE CAN BE DRAWN ON THE BASIS OF ENTR IES REFERRED TO BY THE LD. DR IN THE COURSE OF ARGUMENTS BEFORE US. 35. AS FAR AS A.Y. 2008-09 IS CONCERNED, THE AO HA S PLACED RELIANCE ON THE SEIZED MATERIAL A/VES/01 (PAGES 60 TO 72 & 74). WE HAVE SEEN THE SEIZED PAPERS AND WE FIND THAT THIS SEIZED PAPER ON LY GIVES A LIST OF CLIENTS (STUDENTS) AND THE QUANTUM OF TUITION FEE AND ETF. THERE IS NO OTHER INDICATION IN THESE SEIZED DOCUMENTS THAT THE SOCIE TY HAS RECEIVED ANY PAYMENT ON ACCOUNT OF ETF. 36. AS REGARDS A.Y. 2009-10, THE SEIZED DOCUMENTS ARE PAGES 1 TO 96 AND 113 TO 116 OF A/8/MVJCE AND PAGES 247, 250, 272 , 276, 280, 284, 286 AND 387 OF THE SEIZED MATERIAL A/3/MVJCE. WE H AVE SEEN PAGES 37 TO 41 OF THESE SEIZED PAPERS AS WELL AS PAGE 25. I N ALL THESE PAPERS, THE RECIPIENT OF THE CASH GIVEN IS MJB. IN FACT, THE L OOSE PAPERS CONTAIN A DESCRIPTION FOLLOWING AMOUNT HANDED OVER TO SRI M.J. BALACHANDE R SIR . AS ALREADY DISCUSSED IN THE EARLIER PART OF THIS ORDER , THE DESCRIPTION M.J. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 28 OF 37 BALACHANDER SIR CAN ONLY BE BY AN EMPLOYEE UNDER MJB AND THE SAME CANNOT BE ATTRIBUTED AS KNOWLEDGE OR CONSENT OF THE SOCIETY. 37. IT CAN THUS BE SEEN THAT NONE OF THE SEIZED DO CUMENTS SUGGEST THAT THE MONIES WERE COLLECTED BY MJB ON THE AUTHORITY A ND CONSENT OF THE SOCIETY. ON THE OTHER HAND, THE CIRCUMSTANCES CLEA RLY POINT OUT THAT MJB WAS COLLECTING ETF ON HIS OWN WITHOUT ANY AUTHORITY OR CONSENT OF THE SOCIETY. IN THIS REGARD, WE ALSO FIND THAT THE ASS ERTION MADE BY MJB IN THE COURSE OF ASSESSMENT PROCEEDINGS HAS SIMPLY BEEN DE NIED ( BY THE AO ) WITHOUT ANY FURTHER PROBE OR INVESTIGATION. WE ARE THEREFORE OF THE VIEW THAT THE CONCLUSIONS OF THE CIT(APPEALS) THAT ETF WAS CO LLECTED BY BALACHANDER ON HIS OWN AND THAT THE SOCIETY HAS NOT HING TO DO WITH ETF COLLECTIONS IS CORRECT AND DOES NOT CALL FOR INTERF ERENCE. 38. WE SHALL NOW TAKE UP THE QUESTION AS TO THE QU ANTUM OF ETF, WHETHER THE ENTIRE ETF AS FOUND IN THE SEIZED MATER IAL HAS TO BE BROUGHT TO TAX OR IT IS ONLY 60% AS DETERMINED BY THE CIT(APPE ALS) THAT HAS TO BE BROUGHT TO TAX, OR SHOULD 50% OF ETF BE BROUGHT TO TAX AS CLAIMED BY THE ASSESSEE. 39. IN THIS REGARD, WE FIND THAT THE FACT THAT THE ETF IS REFUNDABLE IN NATURE IS NOT DISPUTED BY THE REVENUE. THE REVENUE S CONTENTION IS THAT THE ASSESSEE HAS NOT GIVEN ANY PROOF THAT ETF WAS REFUN DED TO THE STUDENTS. IN THIS REGARD, THE CLAIM OF THE ASSESSEE IS THAT I T WAS NOT POSSIBLE TO TRACE THE STUDENTS WHO HAD TAKEN REFUND OF THE ETF, SINCE BETWEEN THE DATE OF SEARCH AND THE PERIOD WHEN THE AMOUNTS WERE REFUNDE D SUFFICIENT TIME HAD ELAPSED. IT IS BECAUSE OF THIS HANDICAP THAT THE A SSESSEE VOLUNTARILY WITH A ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 29 OF 37 VIEW TO BUY PEACE HAS OFFERED 50% OF THE ETF TO TAX ON THE PRESUMPTION THAT 50% OF THE ETF HAD BEEN REFUNDED TO THE STUDEN TS. 40. AS TO WHAT IS THE QUANTUM OF ETF THAT WAS REFU NDED BY THE ASSESSEE TO THE STUDENTS, THERE IS NO DIRECT EVIDEN CE AVAILABLE ON THE RECORD. IN THESE CIRCUMSTANCES, ONE HAS TO MAKE AN ESTIMATE OF THE SUM THAT WOULD HAVE BEEN REFUNDED BY MJB TO THE STUDENT S. THE CIRCUMSTANCE POINTED OUT BY MJB, IS THAT AT TIME OF SEARCH ONLY 9% OF THE TOTAL ETF COLLECTIONS WERE FOUND IN THE FORM OF ASSETS FROM T HE POSSESSION OF MJB. THIS ACCORDING TO MJB, IT WILL ONLY GO TO SHOW THAT HE WAS NOT HOLDING THE ENTIRE ETF AND HE HAD REFUNDED SUBSTANTIAL POTION O F THE ETF. THIS CIRCUMSTANCE, IN OUR VIEW, WILL BE A FACTOR WHICH W ILL BE RELEVANT IN DECIDING AS TO WHAT WILL BE THE QUANTUM OF ETF THAT CAN BE C ONSIDERED AS HAVING BEEN REFUNDED BY MJB. IT HAS BEEN THE ARGUMENT OF THE LD. COUNSEL FOR MJB THAT THE CIRCUMSTANCES POINTED OUT BY THE ASSES SEE SHOULD BE ACCEPTED AND ONLY 50% OF ETF OFFERED TO TAX SHOULD BE ACCEPTED AS SUFFICIENT. 41. WE HAVE CONSIDERED THE CLAIM OF THE ASSESSEE W ITH REFERENCE TO THE REFUND OF ETF AND ALSO THE REASONS GIVEN BY THE CIT (APPEALS) FOR ESTIMATING THE ETF THAT HAS TO BE BROUGHT TO TAX @ 60% OF THE TOTAL COLLECTIONS OF ETF BY MJB. WE ARE OF THE VIEW THA T THERE IS NO BASIS WHATSOEVER FOR THE CIT(APPEALS) TO HAVE ESTIMATED T HE ETF @ 40% AS REFUNDED BY MJB TO THE STUDENTS. IN THIS REGARD, W E HAVE TO GO ONLY BY THE PROBABILITIES OF THE CASE. WE ARE OF THE OPINION T HAT THE AO HAVING ACCEPTED THAT ETF IS REFUNDABLE AND GOING BY THE PR EVAILING PRACTICE THAT ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 30 OF 37 WHEN A STUDENT DOES NOT AVAIL OF ADMISSION TO THE C OLLEGE, THE SAME HAS TO BE REFUNDED, IT WOULD BE JUST AND FAIR TO RESORT TO AN ESTIMATE. NO DOUBT THE CIT(APPEALS) HAS NO BASIS FOR ESTIMATING THE ETF RE FUNDED AT 40%. THUS, WE ARE OF THE VIEW THAT IT WOULD BE JUST AND FAIR, IF 45% OF ETF COLLECTED HAS BEEN REFUNDED. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 42. THE CLAIM OF THE REVENUE THAT THE ENTIRE ETF H AS TO BE BROUGHT TO TAX CANNOT BE ACCEPTED FOR THE REASON THAT ETF BY I TS NATURE IS REFUNDABLE AND IT IS COMMON PRACTICE THAT STUDENTS WHO DO NOT GET ADMISSION, SEEK REFUND OF ETF. WE THEREFORE REJECT THE GROUNDS OF APPEAL OF THE REVENUE IN THIS REGARD AND PARTLY ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 43. WE ALSO FIND THAT THE AO ASSESSING THE SOCIETY HAS DENIED EXEMPTION U/S. 12 ON THE GROUND THAT THE SOCIETY WA S COLLECTING CAPITATION FEE. SINCE WE HAVE FOUND THAT THE SOCIETY WAS NOT COLLECTING ETF, THE BENEFIT OF SECTION 11 OF THE ACT SHOULD NOT BE DENI ED TO THE ASSESSEE SOCIETY. WE THEREFORE HOLD THAT THE SOCIETY WOULD BE ENTITLED TO BENEFIT OF SECTION 11. 44. IN CONCLUSION ON THE ISSUES, WE HOLD THAT IT I S ONLY MJB WHO WAS COLLECTING ETF AND NOT THE SOCIETY. WE ALSO HOLD T HAT ETF TO THE EXTENT OF 55% OF THE TOTAL COLLECTIONS OF ETF AS EVIDENCED BY THE SEIZED DOCUMENTS SHOULD BE BROUGHT TO TAX IN THE HANDS OF MJB ON A S UBSTANTIVE BASIS. THE ADDITIONS MADE IN THE HANDS OF SOCIETY IS DIRECTED TO BE DELETED. IT IS ALSO HELD THAT THE BENEFIT OF SECTION 11 OF THE ACT CANN OT BE DENIED TO THE SOCIETY AS THERE ARE NO CIRCUMSTANCES JUSTIFYING TH E DENIAL OF BENEFITS OF ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 31 OF 37 SECTION 11 OF THE ACT TO THE SOCIETY. ACCORDINGLY, THE GROUNDS OF APPEAL OF THE REVENUE IN THE CASE OF THE SOCIETY AND MJB ARE DISMISSED, WHILE THE GROUNDS OF APPEAL OF THE ASSESSEE IN THE CASE OF MJ B ARE PARTLY ACCEPTED. 45. IN THE REVENUES APPEAL BEING ITA NOS.100 TO 1 06/BANG/2012, ANOTHER ISSUE HAS BEEN RAISED BY THE REVENUE. THIS ISSUE IS WITH REGARD TO DISALLOWANCE OF DEPRECIATION. THE ASSESSEE-SOCIETY CLAIMED DEPRECIATION ON ASSETS USED FOR THE PURPOSE OF BUSINESS. ACCORD ING TO THE REVENUE, THE AMOUNT SPENT FOR ACQUISITION OF THE ASSETS HAD ALRE ADY BEEN CONSIDERED AS AN APPLICATION OF INCOME AND THE ASSESSEE HAD THE B ENEFIT OF SECTION 11 OF THE ACT IN RESPECT OF SUCH APPLICATION OF INCOME. IT IS THE CASE OF THE REVENUE THAT WHEN THE ENTIRE INVESTMENT IN ACQUIRIN G THE ASSET HAS BEEN TREATED AS AN APPLICATION OF INCOME, DEPRECIATION O N THE VERY SAME ASSETS SHOULD NOT BE ALLOWED AND IF IT IS SO ALLOWED THAT WOULD BE CONFERRING A DOUBLE BENEFIT TO THE CHARITABLE ORGANIZATION. THE REVENUE IN COMING TO THE AFORESAID CONCLUSION, HAS PLACED RELIANCE ON THE DE CISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF LISSEE MEDICAL INSTITUTIONS V. CIT, 348 ITR 344 (KER) . IN THE AFORESAID DECISION, THE HONBLE KERALA HIGH COURT TOOK THE VIEW THAT WHEN THE FULL VALUE O F CAPITAL EXPENDITURE ON ACQUISITION OF ASSETS IS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES AND WHEN THE ASSESSEE HAS BEEN ALLOWED THE BENEFIT OF EXEMPTION U/S. 11, THE ASSESSEE CANNOT AGAIN CLAIM THE SAME IN THE FORM OF DEPRECIATION, AND SUCH NOTIONAL INCOME WOULD BEC OME CASH SURPLUS AVAILABLE WITH THE ASSESSEE WHICH WAS OUTSIDE THE B OOKS OF ACCOUNTS OF THE TRUST, UNLESS IT WAS WRITTEN BACK WHICH WAS NOT DON E BY THE ASSESSEE. THE COURT FURTHER HELD THAT IT WAS NOT PERMISSIBLE FOR CHARITABLE INSTITUTION TO ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 32 OF 37 GENERATE INCOME OUTSIDE THE BOOKS OF ACCOUNTS IN TH IS FASHION AND THERE WOULD BE VIOLATION OF SECTION 11(1)(A). THE HONBL E KERALA HIGH COURT HAS NOT ACCEPTED THE VIEW EXPRESSED BY THE HONBLE KAR NATAKA HIGH COURT IN THE CASE OF CIT V. SOCIETY OF THE SISTERS OF ST. ANNE, 146 ITR 28 (KAR) . 46. THE ABOVE ISSUE WITH REGARD TO ALLOWING DEPRECI ATION IS NO LONGER RES INTEGRA AND HAS BEEN DECIDED BY THE HONBLE MADHYA PRADESH HIGH COURT, THE HONBLE PUNJAB & HARYANA HIGH COURT AND HONBLE BOMBAY HIGH COURT IN FAVOUR OF THE ASSESSEE. IN THIS REGARD, WE FIN D THAT THE QUESTION HAD COME UP FOR CONSIDERATION BEFORE THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. INSTITUTE OF BANKING, 264 ITR 110 (BOM) . IN THE AFORESAID CASE, IT WAS HELD THAT DEPRECIATION WAS A LLOWABLE NOTWITHSTANDING THAT THE ACQUISITION OF ASSETS WERE ALLOWED AS APPL ICATION OF INCOME U/S. 11(1)(A) OF THE ACT. THE REVENUE HAS BEEN RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. V. UOI, 199 ITR 43 (SC) WHEREIN IT WAS HELD THAT WHERE DOUBLE DEDUCTION, O NCE AS COST OF THE ASSETS AND AGAIN AS DEPRECIATION WAS CLAIMED, SUCH CLAIM SHOULD NOT BE ALLOWED. THE HONBLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF CIT V. MARKET COMMITTEE, PIPLI, 330 ITR 16 (P&H) HAD AN OCCASION TO CONSIDER THE DECISION OF THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF INSTITUTE OF BANKING (SUPRA) AS WELL AS THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA) . THE HONBLE PUNJAB & HARYANA HIGH COURT WAS CONSIDERING A CASE OF A TR UST REGISTERED UNDER ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 33 OF 37 THE INCOME-TAX ACT AS A CHARITABLE TRUST. THE ASSE SSING OFFICER DISALLOWED THE DEPRECIATION ON THE ASSETS ON THE GROUND THAT S INCE THE INCOME WAS EXEMPT, ALLOWING DEPRECIATION TO ASCERTAIN WHETHER THE REQUISITE FUNDS WERE APPLIED FOR THE PURPOSE OF TRUST WOULD AMOUNT TO CO NFERRING DOUBLE DEDUCTION. THE VIEW OF THE AO WAS AFFIRMED BY THE CIT(APPEALS), BUT THE TRIBUNAL ALLOWED THE ASSESSEES APPEAL. ON FURTHER APPEAL BY THE REVENUE, THE HONBLE PUNJAB & HARYANA HIGH COURT HELD THAT I NCOME OF THE ASSESSEE BEING EXEMPT, THE ASSESSEE WAS ONLY CLAIMING THAT D EPRECIATION SHOULD BE REDUCED FROM THE INCOME FOR DETERMINING THE PERCENT AGE OF FUNDS WHICH HAD BEEN APPLIED FOR THE PURPOSE OF THE TRUST. THE HONBLE COURT THUS HELD THAT THERE WAS NO DOUBLE DEDUCTION CLAIMED BY THE A SSESSEE. IN COMING TO THIS CONCLUSION, THE HONBLE PUNJAB & HARYANA HIGH COURT FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF INSTITUTE OF BANKING (SUPRA). THE DECISION OF THE HONBLE SUPRE ME COURT IN THE CASE OF ESCORTS LTD. (SUPRA) WAS ALSO CONSIDERED BY THE HON BLE PUNJAB & HARYANA HIGH COURT. THE FOLLOWING WERE THE RELEVANT OBSERV ATIONS OF THE HONBLE COURT. 8. IN ALL FAIRNESS TO THE LEARNED COUNSEL FOR THE REV ENUE, REFERENCE IS MADE TO THE JUDGMENT OF THE HONBLE APEX COURT IN E SCORT LTD.S CASE (SUPRA), ON WHICH RELIANCE HAS BEEN PLACED BY THE L EARNED COUNSEL FOR THE REVENUE. THE HONBLE SUPREME COURT IN THAT CASE WAS DEALING WITH A CASE RELATING TO TWO DEDUCTIONS BOTH UNDER SS. 10 (2)(VI) AND 10(2)(XIV) OF THE 1922 ACT OR BOTH UNDER SS. 32(1)( II) AND 35(1)(IV) OF THE ACT. THE ASSESSEE THEREIN HAD INCURRED EXPENDIT URE OF A CAPITAL NATURE ON SCIENTIFIC RESEARCH RELATING TO THE BUSIN ESS WHICH RESULTED INTO ACQUISITION OF AN ASSET. THE ASSESSEE HAD SOUGHT TO CLAIM A SPECIFIED PERCENTAGE OF THE WRITTEN DOWN VALUE OF THE ASSET A S DEPRECIATION AND AT THE SAME TIME CLAIMED DEDUCTION, IN FIVE CONSECU TIVE YEARS OF THE EXPENDITURE INCURRED ON THE ACQUISITION OF THE ASSE T. THE APEX COURT OBSERVED : 'WHERE A CAPITAL ASSET USED FOR SCIENTIFIC RESEARCH RELATED TO THE BUSINESS OF THE ASSESSEE IS ALSO IPSO FACTO AN ASSE T USED FOR THE PURPOSE OF THE BUSINESS, IT IS IMPOSSIBLE TO CONCEI VE OF THE ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 34 OF 37 LEGISLATURE HAVING ENVISAGED A DOUBLE DEDUCTION IN RESPECT OF THE SAME EXPENDITURE, ONE BY WAY OF DEPRECIATION UNDER S. 32 OF THE IT ACT, 1961 AND OTHER BY WAY OF ALLOWANCE UNDER S. 35(1)(IV) OF A PART OF THE CAPITAL EXPENDITURE ON SCIENTIFIC RES EARCH, EVEN THOUGH THE TWO HEADS OF DEDUCTION DO NOT COMPLETELY OVERLAP AND THERE IS SOME DIFFERENCE IN THE RATIONALE OF TH E TWO DEDUCTIONS......' IT WAS FURTHER RECORDED THAT : 'THERE IS A FUNDAMENTAL, THOUGH UNWRITTEN, AXIOM TH AT NO LEGISLATURE COULD HAVE AT ALL INTENDED A DOUBLE DED UCTION IN REGARD TO THE SAME BUSINESS OUTGOING; AND, IF IT IS INTENDED, IT WILL BE CLEARLY EXPRESSED. IN OTHER WORDS, IN THE A BSENCE OF CLEAR STATUTORY INDICATION TO THE CONTRARY, THE STATUTE S HOULD NOT BE READ SO AS TO PERMIT AN ASSESSEE TWO DEDUCTIONS.... ..' 9. IN THE PRESENT CASE, THE ASSESSEE IS NOT CLAIMING D OUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION AS HAS BEEN SUGGESTED BY LEARNED COUNSEL FOR THE REVENUE. THE INCOME OF THE ASSESSEE BEING E XEMPT, THE ASSESSEE IS ONLY CLAIMING THAT DEPRECIATION SHOULD BE REDUCED FROM THE INCOME FOR DETERMINING THE PERCENTAGE OF FUNDS WHIC H HAVE TO BE APPLIED FOR THE PURPOSES OF THE TRUST. THERE IS NO DOUBLE DEDUCTION CLAIMED BY THE ASSESSEE AS CANVASSED BY THE REVENUE . JUDGMENT OF THE HONBLE SUPREME COURT IN ESCORTS LTD. & ANR. (SUPRA ) IS DISTINGUISHABLE FOR THE ABOVE REASONS. IT CANNOT BE HELD THAT DOUBL E BENEFIT IS GIVEN IN ALLOWING CLAIM FOR DEPRECIATION FOR COMPUTING INCOM E FOR PURPOSES OF S. 11. THE QUESTIONS PROPOSED HAVE, THUS, TO BE ANSWER ED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 47. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SOCIETY OF THE SISTERS OF ST.ANNE 146 ITR 28 (KARN) HAS TAKEN THE VIEW THAT INCOME DERIVED FROM PROPERTIES HELD UNDER TRUST SHOULD BE ARRIVED AT IN THE NORMAL COMMERCIAL MANNER AND THAT A CHARITABLE INSTITUTION RUNNING A SCHOOL SHOULD BE ALLOWED DEPRECIATION ON SCHOOL BUILDING. THE HONBLE COURT HELD THAT DEPRECIATION CANNOT BE DISALLOWED ON THE GROUN D THAT THE SAID ALLOWANCE IS ALLOWABLE AS DEDUCTION ONLY WHILE COMP UTING INCOME UNDER THE HEAD BUSINESS AND THAT WHILE DETERMINING INCOME O F CHARITABLE TRUST THE HEADS OF INCOME BECOME REDUNDANT. ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 35 OF 37 48. THERE THUS APPEARS TO BE TWO VIEWS ON THE ISSUE , ONE OF THE HONBLE KERALA HIGH COURT IN THE CASE OF LISSEE MEDICAL INSTITUTIONS V. CIT, 348 ITR 344 (KER) WHEREIN IT WAS HELD THAT WHEN THE COST OF A CAPITA L ASSET ON WHICH DEPRECIATION IS CLAIMED IS CONSIDERE D AS APPLICATION OF INCOME BY THE CHARITABLE INSTITUTION, DEPRECIATION ON THE VERY SAME ASSET SHOULD NOT BE ALLOWED AND DOING SO WOULD AMOUNT TO GIVING TWO BENEFITS. CONTRARY VIEW HAS BEEN TAKEN BY THE HONBLE KARNATA KA HIGH COURT, IN THE CASE OF SOCIETY OF SISTERS OF ST.ANNE, THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. MARKET COMMITTEE, PIPLI, 330 ITR 16 (P&H) AND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING (SUPRA). THE PREPONDERANCE OF JUDICIAL OPINION IS IN FAVOUR OF THE ASSESSEE AND THEREFORE, WE RESPECTFULLY FOLLOWING T HE DECISIONS IN FAVOUR OF THE ASSESSEE, HOLD THAT THE CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO ALLOW DEPRECIATION AS CLAIMED BY THE ASSESSEE. THE RELEV ANT GROUNDS OF APPEAL OF THE REVENUE IN ITA NO. 100 TO 106/BAN/2012 ARE T HUS DISMISSED. 49. THE ASSESSEE HAS FILED TWO C.O. I.E., C.O.NO.50 /BANG/2012 FOR AY 03-04 AND C.O.NO.51/BAN/2012 FOR AY 04-05. THESE C .O.S TO THE EXTENT THEY ARE SUPPORTIVE OF THE ORDER OF CIT(A) ON ISSUE S DECIDED IN FAVOUR OF THE ASSESSEE BY CIT(A) CANNOT STAND BECAUSE CROSS OBJEC TION CAN ONLY BE AGAINST THAT PART OF CIT(A)S ORDER WHICH IS AGAINS T THE ASSESSEE. THE OTHER GRIEVANCE PROJECTED BY THE ASSESSEE IN THE C. O. IS THE OBSERVATION OF THE CIT(A) IN HIS ORDER THAT APPEALS OF THE ASSESSE E I.E., THE SOCIETY FOR AYT 03-04 AND 04-05 ARE DISMISSED AS INFRUCTUOUS. IT IS THE STAND OF THE ASSESSEE SOCIETY THAT THE ISSUE WITH REGARD TO DEPR ECIATION AS WELL AS ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 36 OF 37 ALLOWING DEDUCTION U/S.11 OF THE ACT HAD BEEN DECID ED IN FAVOUR OF THE ASSESSEE IN BOTH THE AFORESAID A.Y.S AND THEREFORE THE CIT(A) SHOULD HAVE OBSERVED THAT THE APPEALS FOR THE AFORESAID TWO AYS ARE ALLOWED. WE FIND FORCE IN THE SUBMISSION MADE ON BEHALF OF THE ASSES SEE AND HOLD THAT THE OBSERVATIONS OF THE CIT(A) THAT THE APPEALS FOR AY 03-04 AND 04-05 ARE DISMISSED SHOULD BE MODIFIED TO READ THAT THE APPEA LS OF THE ASSESSEE SOCIETY FOR THESE YEARS ARE ALLOWED. WE ORDER AND DIRECT ACCORDINGLY. 50. IN THE RESULT THE APPEALS BEING ITA NO.100 TO 106/BAN/12 BY THE REVENUE AGAINST THE SOCIETY ARE DISMISSED. C.O.NO. 50 AND 51/BAN/12 FOR AY 03-04 AND 04-05 ARE ALLOWED. ITA NO.90 TO 94/BA N/12 BY THE ASSESSEE, MJB ARE PARTLY ALLOWED WHILE ITA NO.95 TO 99/BAN/12 BY THE REVENUE IN THE CASE OF MJB ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF DECEMBER 2012. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDICIAL MEMB ER BANGALORE, DATED, THE 21 ST DECEMBER , 2012. DS/- ITA NOS.90 TO 106/B/12 & CO NOS. 50 TO 51/B/12 PAGE 37 OF 37 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.
